Do ‘big losses’ in judgmental adjustments to statistical forecasts affect experts’ behaviour?

Do 'big losses' in judgmental adjustments to statistical forecasts affect experts' behaviour?

The behaviour of poker players and sports gamblers has been shown to change after winning or losing a significant amount of money on a single hand. In this paper, we explore whether there are changes in experts’ behaviour when performing judgmental adjustments to statistical forecasts and, in particular, examine the impact of ‘big losses’. We define a big loss as a judgmental adjustment that si...

Models for Product Demand Forecasting with the Use of Judgmental Adjustments to Statistical Forecasts

Do Experts incorporate Statistical Model Forecasts and should they?

Experts can rely on statistical model forecasts when creating their own forecasts. Usually it is not known what experts actually do. In this paper we focus on three questions, which we try to answer given the availability of expert forecasts and model forecasts. First, is the expert forecast related to the model forecast and how? Second, how is this potential relation influenced by other factor...

Measuring the Accuracy of Judgmental Adjustments to SKU-level Demand Forecasts

The paper shows that due to the features of SKU (stock-keeping unit) demand data wellknown error measures previously used to analyse the accuracy of adjustments are generally not advisable for the task. In particular, percentage errors are affected by outliers and biases arising from a large number of low actual demand values and correlation between forecast errors and actual outcomes. It is al...

Do Experts’ SKU Forecasts improve after Feedback?

We analyze the behavior of experts who quote forecasts for monthly SKU-level sales data where we compare data before and after the moment that experts received different kinds of feedback on their behavior. We have data for 21 experts located in as many countries who make SKUlevel forecasts for a variety of pharmaceutical products for October 2006 to September 2007. We study the behavior of the...